Renewable FIT prices expected to drop 25%
March 21, 2012 By Ontario Sustainability Association
Mar. 21, 2012 – Ontario Sustainable Energy Association (OSEA) is neither surprised nor concerned that electricity prices from renewable sources under the Feed-in tariff (FIT) are expected to drop by at least 25%.
The Government of Ontario has demonstrated leadership by passing the Green Energy and Green Economy Act (GEA) and should aggressively leverage its smart investment, maximizing ratepayer benefit while strengthening the emerging green economy.
The prices paid for renewable energy under the FIT are based on a “cost plus a reasonable return on investment” model. The scheduled two-year review of the FIT program was always intended to transparently adjust prices as costs fell.
By 2014, Ontario will phase out all of its remaining coal and by 2016, 25.62 TerraWatt hours (25,620,000,000 kWh) of power will need to be replaced as four of the province’s 20 nuclear reactors come to the end of their lives. There are options for replacing this power generation and almost all are cheaper than rebuilding Darlington nuclear facilities.
A portfolio of sustainable energy, options including: conservation, FIT procured renewables, combined heat and power (CHP) and potentially water power imports from Quebec, represents a real bargain both environmentally and economically.
The two-year review and revitalization of the FIT program has always been in the cards. It shouldn’t be delayed – it is time for Ontarians to move forward and seize the opportunity!
Background – How and Why Renewable Energy is critical to affordable energy
Contrary to rhetoric espoused by some, a portfolio of sustainable energy (conservation, CHP, water power imports and FIT procured renewables) is the cheapest option as we rebuild and reinvest in our long neglected electricity grid and replace our retiring coal and nuclear. For electricity buying Ontarians, more important than the FIT review is challenging the assumption that an expensive rebuild of our nuclear plants is necessary.
In just over two years Ontario’s FIT, combined with growing global demand for renewable energy has driven down the cost of renewable energy generating technology.
Renewable power under the FIT program with its fixed twenty-year contract will keep the average price of power lower in Ontario as we begin to invest and to pay for fuel costs associated with new natural gas and nuclear power.
To ensure this investment in the future is not burdensome, Ontarians need to continue building upon their conservation efforts – after all the lowest cost power is the power we don’t use. A renewed focus on energy conservation will lead to businesses, homeowners and industry consuming less and saving on their bills.
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